In the first part of this thesis I give an overview of the political-economic and telecommunications sector developments in major western economies, as well as some of the advanced Eastern European countries. I use this framework to analyze the telecommunications sector development in countries of the former Yugoslavia: Bosnia and Herzegovina, Croatia, Macedonia, Serbia and Montenegro. Here I address the relevant legal and regulatory landscape development as well as the entrance of the most important business actors in the telecommunications markets of these countries. The history of the telecommunications sector development is also placed in the context of a broader set of political and economic shocks that affected this region of the world after the fall of the Iron Curtain. Throughout the thesis I build on insights learned during the research internship project that I undertook this summer: I visited capitals of all the former Yugoslavian countries and gathered data relevant to the telecommunications sector development by interviewing government and business sector officials there. This information is heavily used for the derivation of a set of policy recommendations and options that government officials should consider for advancing the development of the telecommunications technologies in the countries of the former Yugoslavia. Strategies for telecommunications sector development, their barriers, and solutions for surmounting these barriers are presented in the third part of this thesis.